VentureBeat

Updated

John Doerr and Michael Moritz, the most prominent venture capitalists in the world, just squared off at the annual meeting of the National Venture Capital Association. Largely on the basis of their investments in Google, the two men have spent the last few years jockeying for the top spot on Forbes’ annual Midas List — Moritz (pictured, below) topped the list in 2007, with Doerr (pictured, above) at number two, but this year, their positions were reversed. For all their success, the VCs — described in the program booklet as “the titans” — were genial and even sounded rather humble while sharing the stage together.

Doerr, for example, emphasized his vision of venture capital firms as service organizations for entrepreneurs. They’re trying to help entrepreneurs realize their dreams, which is one reasons why Doerr says he abhors trivializing their work by calling investments “deals”. (Moritz agreed, but said it’s even worse to refer to a company as “a project”.)

When Doerr asked Moritz what one thing he would change about the industry, Moritz responded, “I think there’s a lot of hot air and arrogance in the business that we would all be better off without.”

VCs could stand to do less talking and more listening, he said. There’s a risk of making decisions based on emotion, rather than “a ruthless evisceration of the facts.”

Moritz took his own advice at the end of the interview, when an audience member asked for thoughts on Microsoft’s failed Yahoo bid, and Moritz (an early Yahoo investor and friend of chief executive Jerry Yang) decided it was best not to say anything.

Those comments seem to match Mortiz’s personality — Doerr confirmed that when the two men serve together on company boards, Moritz tends to say very little. With his focus on careful observation and wanting facts, not opinions, is it any surprise that Moritz used to be a reporter at Time Magazine?

Moritz said he looks for similar qualities in an executive, who should be a “calming, level influence who doesn’t wear his emotions or her emotions on his or her sleeve.”

(Doerr gave a more flippant answer, noting that the founders of successful companies “all seem to be white, male nerds who’ve dropped out of Stanford or Harvard and have no social life.”)

Moritz also asked Doerr to share personal memories of high-profile Silicon Valley entrepreneurs. Among the tidbits offered: Netscape cofounder Marc Andreessen has a soft spot for the Creamery restaurant in Palo Alto. Also, Doerr recalled that many of Amazon’s first orders tended to bundle programming books with how-to sex guides, which should tell you something about the company’s early customer base.

Not only have Doerr and Moritz worked together in the past, but their two firms — Kleiner Perkins and Sequoia Capital, respectively — have a long history of collaboration. In fact, Moritz said the firms have partnered for a total of 50 investments. The company names have started with the entire alphabet except for H, J, Q, V, X, Y and Z, and Moritz hopes to eventually cover all 26 letters. Maybe that news will help prospective entrepreneurs who are still searching for a company name …

Update: Jennifer Jones has sent us a link to her audio recording of the panel. It’s definitely worth a listen.

Kleiner Perkins, the well-known venture capital firm that backed Google, Netscape, Sun, Amazon and many others, has always had a soft spot for politics.

Now the firm has added former Vice President and Nobel laureate Al Gore as a partner — in an continued effort to ramp up its investments in the area of green technology. It’s the firm’s latest big name addition. It hired former Secretary of State Colin Powell two years go, and has an arrangement with former eBay executive and California politician Steve Westly, who works out of the firm’s back office. However, since it hired Powell, we’ve heard nothing about Powell’s activities with the firm, so its not clear how much these accomplished people are really help with investments.

There’s an exclusive story in Fortune about Gore’s move, which contains a detailed description of the collaboration between Gore and Kleiner’s leading partner John Doerr. It’s a great piece, written in the classic, engaging style of author Adam Lashinsky. Here’s just the starting snippet:

After “a conversation that’s gone on for a year and a half,” according to Gore, he has decided to join his old pal [Kleiner Partner] John Doerr as an active, hands-on partner at Kleiner Perkins, Silicon Valley’s preeminent venture firm.

The move is more than another Colin Powell moment (the former Secretary of State signed on as a Kleiner “strategic limited partner” two years ago and has hardly been heard from since). Gore is joining the firm as Kleiner makes a risky move beyond information technology and health-care investing into the fast-growing and increasingly competitive arena of “clean technology.”

According to Doerr, by 2009 more than a third of Kleiner’s latest fund, which was raised in 2006 and totals $600 million, will be invested in technologies that aim to reduce emissions of carbon dioxide. Already Kleiner has invested more than $270 million from various funds in 26 companies that make everything from microbes that scrub old oil wells to electric cars to noncorn ethanol. Twelve of Kleiner’s 22 partners now spend some or all of their time on green investments.

Doerr, in turn will join the advisory board of Generation Investment Management, the $1 billion investment company Gore started three years ago in London with David Blood — to invest in publicly traded “sustainable” companies, and Lashinsky’s piece has more.

Kleiner’s efforts to save the planet are noble, and Lashinky’s portrayal of Doerr and Gore’s plans are inspiring. We can’t deny that. However, there’s a question that lurks unanswered here, and that’s just how much these investments will really yield in profits.

Gore won’t be visiting Kliener’s offices regularly, so he’s installed a high-definition videoconferencing system to dial into Kleiner’s weekly partner meetings. He’s also contributing his KP salary to charity, but no word on whether he’ll also be donating his “carry,” or profits from investments.

[in photo above, courtesy of Fortune, is from left, Blood, Gore and Doerr]

(UPDATED: See below.)

Navigenics, a new personal genetics startup with some serious backing, threw back the curtain over the weekend by unveiling its Web site. The Redwood Shores, Calif., startup says it aims to provide individuals with their genetic profiles and then to “arm” them with ways to improve their future heath.

This is very similar to what 23andMe, a similar startup backed by Google and Genentech (see our coverage here and here), intends to do. Adding to the intrigue is the fact that Navigenics has some influential supporters of its own, including Kleiner Perkins Caufield & Byers and Sequoia Capital. KP’s uber-VC John Doerr also has a seat on its board. KP, of course, was an early backer of Google, whose co-founder Sergey Brin just happens to be married to 23andMe co-founder Anne Wojcicki.

Navigenics isn’t anywhere near so shy as 23andMe, which remains largely mum despite some fairly significant disclosures by its investors. From the Navigenics Web site:

Thanks to advances in genomic research, medicine and technology, we can now determine your genetic predisposition for certain diseases, perhaps years or decades before they develop. These insights enable you to take action before a disorder strikes to delay or even prevent the illness altogether.

In other words, Navigenics essentially intends to get people to have their genomes scanned in a rough-and-ready fashion — in other words, they’ll scan your genes with chips that look for single-letter variations in the genetic code, instead of laboriously reading it out letter by letter — and then to match up what they find with the latest information on the diseases to which your genes might predispose you. Navigenics so far seems focused on the question of what your genes might say about disease, whereas 23andMe is apparently also interested in helping people trace their genealogy and creating social networks where they can compare and contrast their genetics.

Needless to say, the privacy implications of all this activity are fairly profound, and neither company has come close to explaining exactly how it plans to protect users’ privacy. That’s a particular concern given that existing online services can be forced to divulge your personal information to the government without even informing you of the fact.

It’s also not clear how long this will take or what it will cost. According to a video on its site, Navigenics says will obtain your genetic information via a “saliva collection kit” — i.e., you’ll spit into a cup and mail it to the company, which will scan it for your genetic details and then presumably post them online where you can look at them. Navigenics also plans to provide users with information that can help them make the best of their genetic predispositions, although exactly how that will work in practice remains to be seen.

At the very least, though, it’s clear Navigenics has come loaded for bear. In addition to the blue-chip VC backing — there’s no information on their Web site as to how much money the company has raised, and so far we haven’t heard back from anyone involved with the company — Navigenics boasts some heavy hitters among its board members, co-founders and partners. For instance, David Brailer, until recently the Bush administration’s point man on electronic health records and more recently chairman of Health Evolution Partners, a private-equity fund that invests in healthcare, sits on the board. So do the company’s co-founders, Dietrich Stephan, a director at the Translational Genomics Research Institute, and David Agus, a protein-biomarker researcher at Cedars-Sinai Medical Hospital in Los Angeles. The company has also lined up some important advisors, including the politically connected Greg Simon, now president of Michael Milken’s FasterCures organization and previously Al Gore’s chief domestic policy adviser.

Navigenics also boasts close ties to Affymetrix, the big gene-chip maker — Affy’s former associate general counsel Stephen Moore will be Navigenics’ general counsel, and Affy founder Stephen Fodor appears in a video on Navigenics’ site, so it’s not too difficult to conclude that the company will be using Affy’s gene chips to sift users’ genetic info. (23andMe, by contrast, was recently reported to have signed a deal with Affy competitor Illumina.) The company has also hired David Ansley, former science editor at Consumer Reports, to run “editorial” (presumably the section providing scientific info about genetic links to disease that customers will be anxious to find), and Amy DuRoss, late of California’s Proposition 71 stem-cell initiative and the California Institute for Regenerative Medicine, as head of policy and “business affairs.” (DuRoss is also apparently Navigenics’ spokeswoman.) The company has also hired Colleen Yoo, formerly e-business director for Blue Shield of California and director of product management for WebMD, as head of product management.

Which is not to say the company doesn’t have a few discordant notes, starting with CEO Mari Baker, recently a KP “executive in residence” and before that president of BabyCenter, a J&J-owned Web site for parents, and a vice president at Intuit. On the other hand, if 23andMe has anywhere near this much depth among its executive team and backers, we have yet to hear about it. Yes, 23andMe has backing from Google and Genentech, not to mention VC firms Mohr Davidow Ventures and New Enterprise Associates, and Esther Dyson — one of the ten volunteers for George Church’s Personal Genome Project, by the way — is on the board. But we haven’t heard much else about what 23andMe has lined up yet.

UPDATE: We’re still waiting for comment from Navigenics, although we’re promised something later this week. That’s something of an eternity in Internet time, but check back by Thursday or so, as I’ll post whatever we learn from them. Meanwhile, Navigenics board member Dana Mead, a partner at KP, tells us by email that Navigenics is doing something “different” from 23andMe and that he sees the company as “more complimentary than competitive” to 23andMe. It will be interesting to see how they pull that off, even assuming Mead wasn’t just suggesting that Navigenics plans on being exceedingly polite where 23andMe is concerned.

When John Doerr spoke at the Ted conference in March, he broke into tears at the end of a 20-minute talk about global warming.

We heard from some participants that the speech was moving.

The talk is on YouTube, and is worth watching. Doerr summarizes what large companies like Wal-Mart can do, what governments can do (citing California’s emission-capping legislation, but more, such as geothermal policy), what entrepreneurs can do (make “designer bugs” for biofuels, for example) and what citizens can do (sign up for carbon neutral programs, or otherwise help policy leaders).

China will pump 22.9 gigatons of greenhouse emissions by 2050, up from 3.3 gigatons, which would be catastrophic. We can’t tell them to stop, because we’re emitting seven times what Chinese do on a per capital basis. In other words, we’ve got to start at home to take urgent measures, to set an example and start pushing urgent measures internationally.

(Hat-tip to Dan Primack)

In separate but related: A Russian scientist, Yury Izrael, says a sulfur-based aerosol sprayed into the atmosphere at a height of 10-14 kilometers (six to 10 miles) could reflect the sun’s rays, and help slow down global warming. (Update: This guy is controversial, as you’ll find out from a quick Google search, and his Wikipedia entry. He has denied global warming is a problem.)

Powerbeam, a new Silicon Valley start-up, is working on a revolutionary idea: Using a laser to beam light, the energy of which would be used to power your laptop or other device without having to plug it in.

PowerBeam says its powerful laser can transmit more electrical power than other methods, and it comes with a safety feature. Dean Takahashi of the Merc has seen the product demonstrated, and he’s duly enthusiastic.

As Dean describes it, here’s how it would work for regular people: You’d sit in a room with your laptop, and a laser atop the light fixture would be directed by a camera system (that’s a hard part) to find your laptop’s solar receptor (the solar cell would be on your laptop). You potentially wouldn’t need batteries.

Obviously, there are huge infrastructure challenges, because you’d need these lasers, fixtures and detection systems in lots of places before regular people on the go can use them. As other recent solar cell start-ups like Nanosolar, Miasole have found out, the science isn’t the big deal. It’s the engineering and execution that will make or break a company. But imagine the potential of such a company, if the laser power itself were to come from solar panels, so that the entire energy transmission system would be solar. No wonder the company is planning to raise venture money. With venture capitalists so passionate about the clean energy area (big-name John Doerr was so choked up at the recent TED conference that he was in tears), Powerbeam may just find some backing.

Read Dean’s story, which mentions the other wireless power efforts to date, including the MIT research effort under Marin Soljacic; Powercast, a Pennsylvania start-up that says it has a safe wireless power system that uses radios to transmit power; and WildCharge, which plans to sell pads that wireless charges cellphones placed on it.

Condé Nast, the New York publisher, today launches Portfolio, a new magazine that chronicles “how business shapes the world—and who the players are that wield the power.”

The first batch of stories is impressive, and if the magazine keeps this up, it’s bound to make waves. Each piece in the first edition has a business angle, but they range from politics to art, technology to entertainment. We’re still reading, and absorbing, but here are the essentials.

For VentureBeat readers, there’s a piece about John Doerr, and a couple of pieces about private equity worth looking at. In Behind the Green Doerr, writer Russ Mitchell profiles one of Silicon Valley’s most powerful venture capitalists, John Doerr, of Kleiner Perkins Caufield & Byers, who is betting big on green technology, and according to the magazine “asking taxpayers to foot the bill.” Kleiner Perkins is investing $200 million in “greentech”—including coal gasification, fuel cell batteries, cellulosic biofuels, and thin solar film—none of which is close to financial sustainability, Mitchell reports, which means that the supersize returns V.C. funds ‘depend on will require massive government subsidies, regulations, and mandates.’ Russell reports that since 2000, Doerr has donated more than $31 million to pro-greentech political candidates and causes. This is a cynical view on Doerr’s activities, one that you haven’t gotten too frequently at VentureBeat lately — mainly because we’ve focused so much on the importance of investing in green technologies, given the real danger of global warming. From time to time, it’s a good thing to step back and call people on their statements that can be considered hype, as Mitchell does with Doerr. However, in defense of Doerr, we’ve found him intellectually honest when we’ve talked with him, even if he does have the penchant to illustrate with extremes. While Doerr talks about the melting of Greenland possibly causing a rise in ocean levels of 20 to 30 feet, that’s clearly unlikely to happen anytime soon, as the critics point out. But Doerr’s point, we thought, is that melting is happening, and that massive rise is what would happen if there were a total meltdown.

–Bonfire of the Vanities author and contributing editor Tom Wolfe checks in with the new “Masters of the Universe” and finds them “even coarser and ruder than their predecessors could have imagined.” The magazine’s summary of the piece: “Part narrative, part reportage, Wolfe’s story profiles the hedge fund and private equity managers, stock and bond traders, and lone-wolf entrepreneurs who live in Greenwich, Connecticut, headquarters for 100 or so hedge funds, which as a group handle about $100 billion, nearly one-tenth of all the hedge fund money in the world. ‘The tales are endless: the hedge fund founder desperate to get his son into one of Greenwich’s socially swell private schools who clips a six-figure check to the first page of the application, witlessly forcing the school to reject both his son and his check or lose all credibility,’ Wolfe writes. ‘Whenever such rich gossip is repeated, somebody invariably says, ‘”Who are these people?’”

–Also, there’s Michael Lewis’ report that Wall Street is about to launch a new way to trade professional athletes the way you trade stocks: “On the proposed A.S.A. Sports Exchange, an athlete would sell 20 percent of all future on-field or on-court earnings to a trust, which would in turn sell securities to the public.”

–A piece about Bruce Sherman, C.E.O. of Private Capital Management, who shredded major newspaper publisher, Knight Ridder, and how the New York Times’ Arthur Sulzberger Jr. is trying to avoid Sherman doing the same to his company.

–What’s Wrong With This Picture?: The 10 biggest private equity firms, which employ roughly 1,000 investment professionals, have just four U.S.-based partner-level women in charge of putting together deals, reports staff writer Sheelah Kolhatkar. Six female dealmakers talk about what it takes to be at the top of their game.

–Weapons of Mass Production: John Hockenberry writes about companies that are reaping the benefits of the Iraqi war: “No matter how you view them, the numbers inspire shock and awe.”

Here’s the latest action:

Big names support Frontline Wireless, which wants to end-run carriers — James Barksdale, former chief executive of Netscape (left, top), and John Doerr, a big-name venture capitalist with Kleiner Perkins (left, bottom), are the latest to back Frontline Wireless, the company we wrote about last month, which wants to bid for radio spectrum dedicated for public safety but which can also be used for profitable wireless offerings.

The long-wave spectrum will support wireless Internet devices, and spectrum ownership is a great way to bypass dealing with the monolithic carriers. Ram Shriram, an early investor in Google is already a backer. Vanu Bose, an entrepreneur and technologist, is also investing, according to the story in the NYT. Fact check: NYT calls Barksdale a Silicon Valley investor, but he isn’t based here. No word yet, though, on whether Google will invest. (Update: Doerr’s investment is on behalf of Kleiner Perkins, we’ve confirmed.)

Breitbart latest news site with traffic — We’re hearing that Breitbart, a news aggregator, got 22 million page views last month, simply by amassing news stories from wire services like Reuters, AP, and by getting an early look at stories posted to press release services (by paying them). Readers come to the Breitbart, click on stories, and Breitbart shares ad revenue with the original sources of news (AP, etc). We’ve contacted Breitbart to contact the traffic numbers. Note: While Google is getting sued from folks like AFP, and being pushed into licensing deals with CBS, Breitbart’s model is to say upfront it will sign the licensing deal.

Maxthon browser gets investment from Google — Maxthon, the browser company headquartered in Israel, has reportedly sold a minority stake to Google for $1 million (Techcrunch). Maxthon, has been catching on in China, in part because of its ability to circumvent Chinese censors. The investment is apparently part of a “strategic deal” that would make Google the browser’s default search engine. Maxthon has just crossed 80 million downloads of its browser, and reports that more than half its 14 million unique monthly users are in China. That’s excellent growth for such a young company, but it has slowed form the rapid pace last year, when Maxthon got five million new downloads a month for a period. And why only 14M uniques, when you’ve had 80M downloads? The company got $5 million from CRV, and seed money from Morten Lund and WI Harper in 2005. Reached by VB, chief executive Netanel Jacobsson declined comment.

Clipmarks releases tool to search what people are clipped — We’ve mentioned Clipmarks before (VentureBeat coverage), a service that lets you clip material from Web pages. It has now released Clipsearch, a way to search what others are clipping, and ranks the clips by popularity.

Krugle and SourceForge partner — Now you can search code on SourceForge, with the code search engine Krugle.

Yahoo signs deal with Viacom — This is the season of major ad deals. Google’s size and momentum brings it most of the publicity. But it has alienated some, including Viacom, which has sued Google for not aggressively filtering for pirated content on its video site, YouTube. Now, Viacom has signed a deal with Yahoo, which makes Yahoo the exclusive provider of search ads at MTV.com, Nickelodeon.com and other sites run Viacom.

Salesforce.com acquires Koral, a document management start-up — Salesforce.com, of San Francisco, will use nine-person San Mateo’s Koral’s technology in a new service to let customers’ employees find and manage documents and other content. The service, Apex Content, lets people collaborate on applications using documents such as video, email, HTML and other office documents. More detailed coverage here. Remember, Koral is the site run by Mark Suster (pictured left), who got pissed off last year when venture capitalists used their Blackberry during a meeting. He ended up getting seed funding. Maybe that’s good. Had he taken VC, he may have been forced to hold out for a bigger deal. We don’t know. See Suster’s blog. Anyway, the Salesforce M&A guys probably weren’t using Blackberrys during the talks.

Updated

Apple TV is a hit — According to early accounts, at least.

YouTube killer? — [Update: This has been confirmed.] Rumors have existed for some time about collusion among the big-media players to challenge YouTube, the king of video sharing. Now the LA Times reports that News Corp. and NBC Universal plan to announce as soon as today that they’re building an online video site “stocked with TV shows and movies, plus clips that users can modify and share with friends.” Not clear how MySpace fits into this.

More on Google’s Pay-Per-Action — We mentioned Google’s PPA announcement Tuesday. However, we didn’t point specifically to the “text link format” ad unit, which some say crosses an ethical line, because it can be considered a pay-per-post. Mike at Techcrunch has a good review. More about the general PPA program at the Mercury News.

Wink sees management buyback — Wink, a start-up that began as a search engine for tags, has revised its business plan, and wants to be a search engine for people. However, some investors balked at this turn, and so Wink’s management has bought back shares from some of the investors — though the exact amount wasn’t specified. Lead investor Greylock has reduced its stake, though remains the largest shareholder, the company confirmed with VentureBeat today. Wink had raised $7 million.

Oil behind the Doerr — PEHub writes more on the ties between well-known venture capitalist John Doerr and oil, noting that Doerr and his wife Ann wrote a $1,000 check this year to Ted Stevens, the Republican senator from Alaska who has repeatedly tried to approve oil drilling in Alaska’s Artic National Wildlife Refuge. Again, this seems to fly in the face of Doerr’s leadership in supporting green policy in Washington and boosting investments in alternative energy. Doerr did not respond to a request for comment yesterday. [Update: To be fair, its entirely possible Doerr wrote the check to help get Stevens' ear, in a shrewd effort to push green policy, but we just don't know...]

Yahoo releases latest widgets for your desktop — They’re designed to use less memory. Here’s a tour.

Other:
–In our Newswire: Amp’d Mobile has raised a whopping round, and reportedly has 200,000 subscribers.
–For those of you relying on our RSS feed, we’ve been making changes, and you may have missed the piece by Stu Phillips, about ruthless scrapers of content, and how publishers need to join ‘em, since they can’t beat ‘em. Michael Cerda, meanwhile, writes a piece about the new wave called “Phone 2.0.”

Some former employees of the failed MyCFO, the financial service company started during boom to cater to wealth individuals, are subjects of criminal investigation for proposing sham tax shelters to its clients.

The WSJ has the story about MyCFO, its demise, and the shadow hanging over those who pushed the tax shelter — and some of the clients that used it.

In particular, the story focuses on the role of some key lawyers at the company, who aggressively proposed the shelter. It also focuses on John Doerr, a well known venture capitalist and lead investor who in email citations from 2001 appeared to applaud the company for pursuing the shelter, according to the WSJ. The practice was only ruled invalid by the IRS only 2002, even if it had always been considered shady by some others.

The financial backers and board members of myCFO were Silicon Valley royalty. They included James H. Clark, co-founder of Netscape Communications and Silicon Graphics; John Chambers of Cisco Systems Inc.; Thomas Jermoluk, former chairman of Excite@Home; and former Netscape boss James Barksdale. The firm’s outside legal counsel was Larry Sonsini, lawyer to Silicon Valley’s stars.

Two high-profile Silicon Valley investors known for their aggressive support of alternative energy have helped pump $20 million into a new Emeryville biology company called Amyris.

The investment is notable because Amyris is using synthetic biology to search for an ideal alternative fuel to replace petroleum. It is looking for a molecule similar to ethanol, a biofuel derived from plants such as corn, but even better. News of the investment plans came in June, but the company said the money has now arrived. It made several other announcements, including a new chief executive.

Khosla Ventures, the venture firm of Vinod Khosla, led the investment. He was joined by Kleiner Perkins, the venture capital firm of John Doerr. Khosla and Doerr have drawn attention with their significant investments into alternative energy. Kholsa, in particular, has made numerous investments into ethanol facilities. Texas Pacific Group Ventures also invested.

Despite his ethanol investments, Khosla has said ethanol is not the best alternative energy source long-term. In fact, we wrote yesterday about Khosla’s search for an efficient way to produce say, butanol and other biofuels that would be better than ethanol. Ethanol faces limitations as an alternative fuel to petroleum, because of the cost needed to separate it from water during the production process.

Amyris so far has focused on other projects, such as pharmaceuticals, including creating a low-cost malaria drug, artemisinin. But Amyris founder Jay Keasling, and head of the company’s scientific advisory board, has been researching butanol and other chemicals as a UC Berkeley professor of chemical engineering and bioengineering.

Keasling and British Petroleum (BP) are two of the leaders on butanol research. So it is also significant that Amyris has announced the appointment of John G. Melo, previously president of U.S. Fuels Operations for BP, as chief executive officer. He has experience running BP’s ethanol operations. The company’s Web site also shows it is hiring fermenting experts.

Amyris co-founder Neil Renninger vice president of development, said the company’s core team comes from Keasling’s lab and that the goal is to design biofuels that the market wants. Butanol is an example of a molecule the company is targeting, but there are others too. “There’s a spectrum of molecules,” he said. The company is focused on making enzymes that are optimal for breaking down cellulose, which can be used for producing biofuels.

Rob Day, of Expansion Capital Partners, another investor in clean technologies, said there are lots of efforts underway in the race to find a better biofuel, and that its possible that one particular technology will take a dominating position. Khosla, more than anyone, is investing in many different efforts, on the idea that one of them will pan out, he said. “If you back a lot of horses, it’s more likely you’re going to win.”

Joining the Amyris board are Doerr, Samir Kaul, general partner of Khosla Ventures and Geoff Duyk, managing director, TPGV. “Greentech could be the largest economic opportunity of the 21st Century,” said Doerr said in a statement. Doerr has repeated this phrase often, a change in tune from a few years ago when he was saying the Internet represented the biggest opportunity.

Vinod Khosla, the successful Silicon Valley venture capitalist who is leading the effort to raise a tax on oil extracted in the California, has responded to the oil industry’s charges that he has conflicts.

In an interview the WSJ (sub req), Khosla says his investments in alternative energies aren’t really a conflict with his $1 million support of Prop. 87, which would levy a tax on oil - even though some of the tax proceeds would support alternative energy research.

Mr. Khosla, in an interview, says he wouldn’t accept the seat on the proposed California Energy Alternatives Program Authority if it were offered to him. He also says that if any energy companies he backs receive money through the initiative, he will donate his profit on those investments to charity.

Here’s a guy who has leaned Republican in his political views, who now says he doesn’t want to profit from his energy investments, and that he’s doing this for meaning only — to combat what he says are the misleading claims by the oil industry about economic hardships the measure might cause. We’ll se how the oil industry responds, now that the “conflict” wind is out of their sails.

See our earlier piece here, where we pitted Khosla against a leading oil guy in a set of Q&As.

The WSJ story is worth reading. It says Google co-founder Larry Page, Wendy Schmidt (wife of Google chief executive, Eric Schmidt) and Kleiner Perkins venture capitalist John Doerr have all given about $1 million each to support the tax.

Updated

3Jam has launched a new way to texting friends in groups, and we think it’s going to do well. Multi-person texting simply isn’t possible yet, and with 80 million people with texting in the U.S. and growing, 3Jam may be hitting a sweet spot.

And texting is the technology of the future. Among college students, there’s a 75 percent usage rate. (For the uninitiated, when we say texting, we’re refering to the short messages people send on their mobile phone, known as SMS, or Short Message Service).

Texting is a little awkward. You type on a small screen, and you’re only able to message one person at a time — until now. 3Jam is solves that problem. It lets you message more than one person — in fact, as many people as you want. Now, if you are running late to that concert, you don’t have to send a message three times to your friends to notify them individually. You just send it once.

We tinkered with 3Jam over the past couple of weeks, and it works well. On our Treo, it took a while to get used to, because the Treo messaging interface is different from most phones. But 3Jam has since released a special application for Treos, which makes things a lot easier. So for Treo or regular phone, it works smoothly.

Here’s how it works. On most phones, you type in: “text (friend #1’s name) (friend #2’s name)” This creates the group. Then you type in a message, and send it to “43526,” which is 3Jam’s short-code number. It is that easy. The message goes to those friends, as well as to your own phone.

Once your friends get the message, they can hit “reply” and send a message to the group too. 3Jam assigns a random number, say 54880, to the group, so that anyone in the group can message the group at that number through the day without having to retype the names.

The Treo app makes it even easier. It requires a download. But then it saves time. Under a “To” tab, you can pull down a menu to select the contacts you want to send to, and send the message to them.

(You can also go to 3Jam.com for directions on how it all works, though the Treo App will soon be available exclusively through Andrew Carton’s blog Treonauts until DEMO. Update: Specific link to Andrew’s post is here, and download itself is here.)

We talked with Andy Jagoe, chief exec of the small start-up. The idea for 3Jam arose when he tried emailing some people for after-work drinks. He found email only worked when people were sitting at their desk. He wanted to reach them all on their phones, where they were likely to be as they rushed for the door at the end of the day. Enlai Chu is the other co-founder.

3jam began testing a private version of this last year. He has since added a few key people to his team, including Thad White, from Yahoo’s mobile product team, and Tom Purcell, who was the first business exec at Danger, and who helped that company launch with T-Mobile.

The 3Jam service will go live officially on Sept 25, when the company launches at DEMO

White brought some “aha” insights from Yahoo, Jagoe explains. About half of all Yahoo’s traffic comes from messaging, either email or instant messaging. And a full one-third of the email traffic is to more than one person or to “reply all,” Jagoe says. If you enable multi-party texting, the thinking goes, you’ve got an immediate, huge market. There are 200 million people in the U.S. with mobile phones, and 40 percent of them are texting, but none of them are able to do multi-party texting.

From 3Jam’s trials, Jagoe says users are reporting they are using their phone more. Jagoe says multi-party messaging could mean a 30 percent increase in overall text messaging.

One user sent more 656 messages in a 4-week period, and some said they’d pay for the capability, Jagoe said.

(Update: We should have mentioned how 3Jam plans to make money. 3Jam wants revenue share from telecom carriers. Regarding pricing, no matter how many people are in the group, a reply counts as only one text message on their phone bill. Meaning, that if you send a group text message to four people, you don’t pay for four text messages, you pay for only one.)

We first mentioned 3jam back in May. At the time, the Menlo Park start-up had pulled in $500,000 of what was a $1 million venture capital commitment from New Enterprise Associates.

With VC investments in clean technologies growing, and the state making important energy policy decisions to fend off global warming, the oil-ethanol debate is growing in importance. The valley has a stake in understanding the economics of a switch away from oil, to support ethanol.

Robert Rapier (pictured below) works for an oil company, but he says he cares about the environment. He co-authors a powerful blog called The Oil Drum, and recently wrote a scathing critique of Silicon Valley venture capitalist Vinod Khosla’s policy stance on ethanol and other issues.

This is significant because Khosla is probably Silicon Valley’s highest profile leader on the environment these days, along with John Doerr, a venture capitalist with Kleiner Perkins.

The gist of the argument is that Khosla — one of the most successful venture capitalists of all time — is overstating the benefits of ethanol, has his facts wrong, and that it is dangerous to place the sort of faith in ethanol that Khosla is proposing we make as a nation.

The context, of course, is that Khosla is not only making huge investments into ethanol and other alternative fuels, he is also pushing a state oil tax initiative — and so you’d expect an backlash from irked oil interests. But if you read Rapier’s critique carefully and the response he has gotten from readers, you can tell he is not just a propaganda mouth-piece; he’s got substance. We’ve talked with him.

We first mentioned Rapier’s critique here, and promised to keep you informed of Khosla’s response.

So what did Khosla do? Well, last month he ventured on to Rapier’s own turf, submitting his response on Rapier’s blog. Rapier, bemused, warned that Khosla might be torn to shreds by his readers — which is what happened. But you’d expect that, on Rapier’s turf. So we’ve since done our best to sort through the rhetoric. Here’s what we came up with, after going back and forth between the two sides. Our own conclusion is that Khosla may have been a bit loose with a fact or two, not necessarily to deceive but because he is to new to the field. But Khosla has got a solid moral argument, in that we desperately need to wean ourselves from greenhouse gas producing energy. You’ll have to read everything yourself to decide. While Rapier wins on a few counts, regarding science and economics, we’re still left wondering how we realize the ultimate goal: reducing global warming.

On to the debate summary:

1) After reading Rapier’s original critique closely, and reading through Khosla’s response, we were left thinking that Rapier had won the debate on at least three counts.

He’d corrected Khosla on the following:

a. The energy return on energy invested, or the amount of energy you get out of oil and gasoline for every unit of energy you put in to create a unit of energy is important. For ethanol, it is only 1.2. For gasoline, it is 5.

b. Brazil, which has been heralded as a great example of oil-independence, has displaced only 10 percent of its petroleum usage with ethanol, not 40 percent.

c. The price of gasoline is higher than ethanol.

2) So we took these three points to Khosla and asked him about them again, to make sure he’d lost on these points. Here’s how Khosla responds.

a. One energy return on energy invested: “[Rapier] is way off in how he calculates it. He calculates only the production energy but his fuel energy is non-renewable and ethanol’s fuel energy is renewable. He ignores that. His is technical and mine is broadly accepted as the right way to calculate.” (Our note: So now we are getting to the heart of the matter. What Khosla seems to be saying is that renewable is inherently better. While market factors alone do not make renewable better, we should as earthlings realize that renewable fuel is better; ethically, for the planet’s sake. But stay tuned, Rapier will come back at this, below).

b. On Brazil: “[Rapier] calculates % of all petroleum use while I have always stuck to the % of gasoline that has been replaced. This is not critical but the Brazilian Ag ministry still uses the 40% number in all their slides.” (Again, stay tuned).

c: The price: “[Rapier] talks about price. I only talk about production cost. There is huge margins as the oil companies switch rapidly away from MTBE (because of legal liability) that has caused a temporary spike in ethanol demand. Supply is fast catching up but this distortion was created by the oil companies. Any economist will tell you price should reflect cost for any commodity product.” (Our note: Ok, but the price is not reflecting the cost. So now we’re learning that there is no argument that ethanol is cheaper than gas. Once you factor in shipping costs, etc, the market is saying gasoline is still cheaper? Stay tuned. )

3) Still not satisified we’d reached conclusion, we took these points back to Rapier. Here’s how he responded:

a. On energy return: “[Khosla's] claim that ethanol is renewable is false. The only renewable part is the very tiny fraction of net energy. For an input of 1.0 BTUs of fossil fuels, you get back out 1.2 BTUs of ethanol. You only netted 0.2 BTUs, but a portion of that is animal feed byproducts. With respect to fuels in and fuels out, you got out about the same amount of ethanol BTUs as your fossil fuel BTU inputs. In other words, ethanol is merely recycled fossil fuels. I just did an in-depth explanation of this at The Oil Drum. You might ask how ethanol is a renewable fuel, when its energy inputs are fossil fuels.

b. On Brazil: “Khosla’s own slides say ‘Petroleum use reduction of 40%.’ This is exactly the kind of misinformation that I have criticized. Look at slide 5 of his July 2006 version of his PPT ‘Biofuels: Think Outside the Barrel.’ Watch his Google video presentation, and you will hear him say ‘Brazil has displaced 40% of their petroleum.’ Even the gasoline claim is misleading, since they didn’t replace 40% of their gasoline. The usage numbers from the Brazilian Ministry of Mines and Energy are: Diesel 54%, gasoline 26%, and ethanol 17% by volume. The 40% number is because 17% is 40% of 26%. I will leave it to you to determine whether that is misleading. It is also inaccurate in the fact that the BTUs of that 17% ethanol are far less than the BTUs of that 26% gasoline. So, in this case 17% is not really 40% of 26% in the area that matters: How much energy was actually displaced.

c. Price: “[Khosla] refutes himself here: ‘Any economist will tell you price should reflect cost for any commodity product.’ That’s exactly what I have been saying. If ethanol had a lower production cost, why has it been more expensive for 25 years? See this chart.”

4) Finally, believing we’d finally pinned down Khosla on at least these three points, we took it back to Khosla one last time. But Khosla is a fighter, and here’s how he responds:

a. Energy returned: “[Rapier] is wrong and misses the point that our two main objectives are (1) reducing petroleum use, and we reduce it by 90% even with the worst ethanol. Don’t know why they keep ignoring this. We don’t have enough oil but have lots of coal; (2) green house gas reductions, and we reduce that by 20% with the typical corn ethanol. The NRDC will tell you (see NRDC paper Ethanol: Energy Well Spent) that there is a gradation of carbon emissions PER MILE DRIVEN depending upon how the ethanol is produced. That chart is in my paper and I highly recommend you reproduce it in your reporting. Oil interests and other interests (some wind guys told me they oppose this because a focus on biofuels will reduce wind funding). The Cilion plants in California will be approx 2X the carbon reduction of gasoline per mile driven because they use dramatically less natural gas (or fossil fuels). (Our note: Ok, so again, Khosla is falling back on the ethical/moral argument that market forces don’t take into account certain higher needs. We need to reduce dependence and stop global warming. Yes, we agree with him. So we need policies, such as subsidies, to create real market forces to help this. That’s why Khosla is supporting the oil tax. What Rapier is saying is that there’s a real, serious economic cost to this. We agree with him too. Somehow, then we need to meet in the middle!)

b. Brazil: “It is hard to put everything on a slide but I generally clarify that it is ‘petroleum use reduction for gasoline’ when speaking to the slides. (Note: Wow, so Khosla has quasi-conceded on a point. Mark for history books).

c. Price: “Wrong again. [Ethanol] price is up because of oil company mismanagement and their rapid switch to ethanol to minimize liability from MTBE. In 2004 it was selling at $1.40 ’sales price.’ Transportation is not a huge part of the cost of ethanol despite what opponents say and it is coming down with destination ethanol plants (like all the ones being built in California, TX, NY…). The destination ethanol is often (definitely true of the ethanol that our company Cilion will be producing in California) much greener if they are built around existing cattle feedlots. (Our note: Khosla uses a technicality to defend himself here. Fact is, ethanol is still more expensive than gas. However, he’s got a point. The oil lobby and industry is large enough that any move, such adopting ethanol additives quickly, in a regulatory-required move away from MTBE, can indeed jolt prices.)

Now you see why we concluded as we did. There is a ethical-market divide in these arguments, and it is unresolved. Stay tuned, for when we come back with the second round of the Oil Drum debate.

———————-

Final note: Check out this Merc sory, about a nice new oil find, albeit fairly limited; a reminder of how quickly things can change.

Turns out, a group of Silicon Valley venture capitalists, including Kleiner Perkins’ John Doerr, and other business folks helped tipped the balance on the landmark global warming bill passed last week.

The bill, AB 32, mandates that California reduce global warming emissions by 25 percent — to 1990 levels — by the year 2020. Major carbon-emitting industries will be forced to report emissions to the state Air Resources Board.

California Assembly Member Pavley, co-author of AB 32, apparently told the group, which also included Amy Christensen, of Google and Felix Kramer of CalCars (see his VentureBeat “contributor” column today), that their press conference a few weeks ago had helped tipped the scales. By arguing the legislation will help California’s economy, the group (pictured above) produced media coverage depicting California’s business community as divided on the legislation’s economic benefits — and thus, making it more than simply a battle between business and environmentalists. The Environmental Entrepreneurs group, based here in San Francisco, held a total of 124 individual meetings with members of the legislature, plus multiple other meetings — not to mention organizing letter and phone campaigns.

Why do we care? We’ve mentioned before California’s significant role in influencing global policy on the environment. Don’t want to overstate the point, nor do we want to overstate the role of this one group, but this latest example suggests how a few business leaders here in Silicon Valley can potentially have a very large impact on world policy by driving up to Sacramento and trying to move the needle a little bit.